Financial Performance - Net income for Q3 2022 was $16.5 million, a decrease of 16.2% from $19.7 million in Q3 2021[148]. - Net interest income decreased by $1.1 million to $48.5 million in Q3 2022, compared to $49.6 million in Q3 2021[149]. - Net interest margin decreased by 30 basis points to 2.69% in Q3 2022 from 2.99% in Q3 2021[150]. - Total non-interest income increased by $2.1 million to $5.9 million in Q3 2022[157]. - Total non-interest expense increased by $185,000 to $32.0 million in Q3 2022[159]. - Provision for income taxes decreased by $2.0 million to $5.3 million in Q3 2022 from $7.3 million in Q3 2021[162]. Asset and Liability Management - Total assets increased by $169.7 million to $7.89 billion at September 30, 2022, from $7.72 billion at June 30, 2022[128]. - Net loans receivable increased by $238.0 million, or 4.4%, to $5.61 billion at September 30, 2022, from $5.37 billion at June 30, 2022[132]. - Total deposits increased by $246.0 million, or 4.2%, to $6.11 billion at September 30, 2022, from $5.86 billion at June 30, 2022[142]. - Nonperforming assets decreased by $14.8 million to $77.4 million, or 0.98% of total assets, at September 30, 2022[136]. - The allowance for credit losses totaled $47.6 million, or 0.84% of total loans, reflecting an increase of $555,000 from $47.1 million at June 30, 2022[139]. - Investment securities available for sale decreased by $80.9 million to $1.26 billion at September 30, 2022[129]. Capital Management - Stockholders' equity decreased by $19.0 million to $875.0 million at September 30, 2022, from $894.0 million at June 30, 2022[145]. - Book value per share decreased by $0.14 to $12.88 at September 30, 2022[146]. - The company repurchased 759,806 shares of common stock at a cost of $8.7 million during the quarter ended September 30, 2022[147]. - Total capital to risk-weighted assets ratio was 12.67% as of September 30, 2022, exceeding the minimum regulatory requirement of 8.00%[169]. - Total capital to risk-weighted assets increased to $781,745 (14.49%) as of September 30, 2022, compared to $672,274 (13.10%) on June 30, 2022[170]. - Tier 1 capital to risk-weighted assets rose to $747,258 (13.85%) as of September 30, 2022, up from $642,336 (12.52%) on June 30, 2022[170]. - Common equity tier 1 capital to risk-weighted assets improved to $747,258 (13.85%) as of September 30, 2022, compared to $642,336 (12.52%) on June 30, 2022[170]. Interest Rate Risk - Economic Value of Equity (EVE) decreased by 19.96% to $971,747 under a +300 basis points interest rate scenario as of September 30, 2022[177]. - Net Interest Income (NII) decreased by 8.98% to $177,190 under a +300 basis points interest rate scenario as of September 30, 2022[177]. - The company adopted a five-year capital transition relief period for the implementation of CECL, with the two-year delay ending on June 30, 2022[170]. - Interest rate risk is managed through an Asset/Liability Management (ALM) program overseen by the Board of Directors[173]. - The company’s internal interest rate risk analysis measures the sensitivity of projected NII and EVE to interest rate changes[174]. - As of September 30, 2022, the company’s interest rate risk analysis included scenarios of immediate and permanent shifts in the yield curve up and down by 100, 200, and 300 basis points[176]. - The company's net interest income (NII) is projected to decrease by 15.37% to $1,089,795 thousand under a +300 bps interest rate scenario[178]. - Under a +200 bps scenario, NII is expected to decline by 10.21% to $1,156,219 thousand[178]. - A +100 bps change in interest rates would result in a NII decrease of 3.71%, bringing it to $1,239,935 thousand[178]. - The baseline NII at 0 bps is reported at $1,287,700 thousand, with no percentage change[178]. - A -100 bps scenario indicates a slight NII decrease of 1.20%, resulting in $1,272,203 thousand[178]. - The company's economic value of equity (EVE) is projected to decrease by 15.37% to $178,865 thousand under a +300 bps scenario[178]. - EVE is expected to decline by 10.21% to $187,601 thousand under a +200 bps scenario[178]. - The company acknowledges that future interest rates and their impact on NII are unpredictable and based on numerous assumptions[180]. - Changes in market interest rates can significantly alter projected cash flows of interest-earning assets and interest-costing liabilities[179]. - The company highlights that certain assets and liabilities may react differently to changes in market interest rates, affecting overall interest rate risk exposure[180].
Kearny Financial(KRNY) - 2023 Q1 - Quarterly Report